LAHORE: Volatile exchange rates, higher markup and the weakening rupee are the key hurdles in tapping the full potential of the Rs20 trillion packaging industry, said Zaki Aijaz Qureshi, director of Roshan Packages Limited.
“The manufacturing sector mostly relies on imported raw material and the packaging industry is no exception. Plastic, paper and tinplate packaging heavily rely on imported raw material. Volatility in exchange rates and international price trends of raw materials have a significant impact on the costs,” he said.
“The State Bank of Pakistan should take measures to bring stability in the exchange rate. There is a need to check speculation to stop the free fall of the rupee against the dollar,” he said, while talking to BOL News.
“Inflation and high energy tariffs have increased the cost of doing business. Yes, inflation is a global issue due to the pandemic but its impact in Pakistan is much more severe due to the depreciation of the local currency. The government should take measures to reduce the cost of doing business, as our products are not competitive in the global market,” Zaki said.
High interest rates are another challenge for the packaging industry. The share of borrowings of the packaging industry is around 41 per cent of its actual capital. The industry’s short-term loans account for 59 per cent of the total borrowing.
The increase in interest rate has made it difficult for the industry to manage day-to-day affairs, he said.
“The increase in interest rate has enhanced the borrowing cost. The government should bring the interest rate at par with the regional states to provide some breathing space to the cash-strapped Small and Medium Enterprises,” he added.
Zaki Aijaz Qureshi is a successful entrepreneur who took the family business to new heights through good management and innovative practices. He formally joined the family business in 2000 and achieved unprecedented success through a number of initiatives.
He is a humble and down to earth man who believes in strictly following business ethics and giving proper care and due importance to the employees.
Having an interest in trade politics, he is central chairman of the All Pakistan Corrugated Cartons Manufacturers Association.
Zaki is a proud member of a literary family and the one that introduced Pakistani fruits and vegetables to other nations.
His father Dr Aijaz Hassan Qureshi launched Urdu Digest in 1960, which was Pakistan’s most circulated publication due to its engaging content.
Launched in 1989, Roshan Enterprises started fruit export and became Pakistan’s largest fruit exporter.
The UK, the UAE, Saudi Arabia, Iran, Malaysia, Singapore, Bangladesh, Russia, Vietnam, Philippines, Indonesia, Mauritius and Norway are among the top export destinations.
The company’s futuristic approach prompted the setup of an in-house packaging unit. In 2002, Roshan Packages Limited was established to meet internal demand for corrugated packaging. It established European Flexible Packaging and Co-extruded Film Solution Plants in 2011 and 2015, respectively. It is now among the top three companies having sizeable market share.
Following are the excerpts of a tête-à-tête with him.
What was your first venture?
After completing my education, I joined the family business in 2020. I am quite satisfied with my contribution so far. We introduced innovations for safe transportation of perishable items to the end-consumers both within Pakistan and abroad. Leading national and multinational companies are our satisfied clients.
Where does our packaging industry stand? What is its actual potential?
Packaging is a Rs20 trillion industry with the majority of the market share captured by unregistered players. About 20 registered companies are getting 30 per cent of the share and the rest goes to those not paying taxes at all. It is difficult for the registered companies to compete with those not paying any tax.
This mother of all sectors has yet to get recognition as an industry. The government should document and register all the companies, as it would help bring the entire supply chain in the tax net. In addition, it will help provide a level-playing field to all the companies.
How can we enhance agri products export?
We should adopt the “grow for export” motto for getting benefits of huge potential in the country. Agriculture zoning is necessary for diversification of crops. The government should facilitate farmers in increasing per acre yield and reducing the pre-harvest losses. Cold storage and packaging industry should be strengthened to meet the future requirements. We should also focus on export of agri byproducts such as jam, fruit pulp and pickles.
How can we bridge the trade deficit?
The government should take short- and long-term measures for bridging the ever-increasing trade deficit. Our problems will persist unless we reduce our reliance on imports and boost exports to earn dollars. There is a need to discourage import of luxury items, especially cars.
We should put an end to unnecessary imports, reduce the input cost of export-oriented industries, diversify the products, value addition and explore new export destinations. We should give due importance to all the sectors such as information technology, engineering and agriculture instead of continuing the decades-old practice of focusing on large-scale manufacturing and that too only the textile sector.
How do you see interest rate hike?
An increase in the markup rate has enhanced the borrowing cost of businesses. Now, it is more difficult for the cash-strapped Small and Medium Enterprises and the cottage industry to manage their businesses. The SBP should reduce the interest rate and bring it at par with the regional countries to provide some breathing space to the businesses.
What is your take on e-commerce growth?
E-commerce has grown considerably in the
post-Covid-19 scenario. There is a need to take due share from the trillion dollars global e-commerce industry. The entry of Amazon and Alibaba in the Pakistani market is a good omen. The development will motivate other such companies to enter the market and the local players will focus on improving the quality and service delivery.
What do you suggest to improve the business environment in the country?
The environment is not good both for the existing players and the new entrants. High input cost, volatile exchange rate, high interest rate, inflation and multiple taxes have affected the businesses. The government should devise policies after due consultation with the stakeholders. There is a need to provide a one-window facility and tax exemptions to startups.
Curbing inflation, reducing input cost, checking double taxation, reducing markup and exchange rate stability are necessary for a conducive business atmosphere.
What is the future outlook of the overall business environment in Pakistan?
Pakistan has enormous resources and talented manpower. The agriculture sector alone has the potential to take the country out of the prevailing crises. Our 60 per cent of the population is under 30 years of age. The government should take measures to stop brain drain. Institutions should be set up for skill development. There is a need to boost SMEs and the cottage industry, which are the backbones of any economy.
What makes you join business politics?
My politics is aimed at playing the role of a bridge between the fellow colleagues and the policymakers and executors. I have always worked for the betterment of my fellow businessmen.
